Meet The Chinese Luxury Shoppers Who Are Taking Over The World

The New Silk Road is catering to millions of Chinese feeding a
new Bling Dynasty. Within this substantial empire, many
characters stand out.

Let me introduce you to five of them.

Spending time in China and meeting Chinese consumers abroad has
shown that some stereotypical luxury consumers do actually exist.
Rather than quote real people who may find it uncomfortable or
rude, I have decided it was easier to present you with five
avatars.These are representatives who embody the thoughts and
feelings of luxury consumers coming from very distinct subsets of
the Chinese culture.

Here they are. (See Figure I-1.)

Calvin Li

Calvin is 26 and is brand obsessed, loves logos and while he's
not that affluent, he wants people around him friends, family,
business partners to know he's succeeded.

He is what the managers of Coach would call a ‘status lover', a
somewhat disappearing breed of Chinese luxury consumers. He's
after brands as he's eager to fit in to what he sees as modern
China.

Calvin doesn't speak English and I don't speak Putonghua so
every time we've hadto chat, I brought a friend along with me for
translation purposes.

Calvin works as a manager in a textile manufacturer. He lives in
Jinjiang, a third‐tier city, and an hour away from Xiamen, where
Calvin goes some evenings for fun.

His favorite brand is Louis Vuitton, but that's way too
costly for him so midmarket imported brands like Calvin Klein
work well. Three years ago, some Xiamen‐based friends made fun of
him as he was wearing suit labels outside the cuffs these were
the labels he was supposed to have cut off.

He is part of a few people in his entourage who bought brands
that they thought were legit but ended up being interpretations
of Western or Hong Kong–based brands: Qiaodan Sports (sued
by Michael Jordan for using his Chinese name and a similar logo),
Gio Amrami (instead of Giorgio Armani) suits and others.

Lewis Wang

Calvin's older cousin he's 30 now runs a property business in
Xiamen, the city known to some as China's Saint Tropez. He
is very rich by local standards. He was smart to begin with and
has great business acumen and connections.

His English is not great, and some mistakes he makes are
opportunities for us to spend more time talking and laughing and
less time understanding each other. But he's a real entertainer
and as long as he can get by, he's happy with that.

He seems fearless and clearly is enjoying life to the fullest.
He's a loud man, likes a drink and a few more but he's a great
laugh. Lewis has no inhibitions and when I think of him, it
reminds me of Dr Seuss's words: ‘Be who you are and say what you
feel, because those who mind don't matter, and those who matter
don't mind'.

A bit like Calvin, Lewis has ‘nouveau riche' habits, loves brands
but can actually afford quite high‐end kit. Unlike Calvin, he's
got a passport like 4% of Chinese (or more than 50 million in
total) and he can afford to buy a Louis Vuitton bag and has
travelled in many Chinese cities. He went to Taipei late 2011, to
Hong Kong for the first time last October, to Macau earlier this
year and dreams of Milan and Los Angeles for his first ‘true
overseas' trip.

I write ‘true overseas' as Calvin, like most Chinese, considers
Taiwan, Hong Kong and Macau part of China.

He's what the press calls Tuhao: tu is dirt; hao is splendor; so
the meaning is along the lines of ‘parvenu peasant.' Chinese
popular culture despises Tuhao and at the same time secretly is
envious and jealous of them. Lewis bought the gold iPhone 5s that
came out in 2013, the one Apple put out specifically for the
Chinese market, known in China as the Tuhao Gold and in the Apple
HQ as the Kardashian iPhone.

A
woman shops at Louis Vuitton in Shanghai.REUTERS/ Carlos Barria

Tiffany Ma

Tiffany just started her first job in Guangzhou at age 22 in
an advertising agency. She's ambitious, graduated from a good
school but has limited revenues in this first job. She's never
been abroad but would love to go to Seoul or Tokyo as they seem
so refined.

Her English is conversational and fine. She recently started
taking a few Korean lessons, just because it's cool, and she'd
like to figure out what on earth the K‐Pop bands she loves
so dearly are singing about. She also follows many of the Korean
soap operas that air on Chinese TV channels. She's the Chinese
equivalent of the Japanese Office Lady (or “OL”) and
has relatively limited needs, so she has quite a bit of
disposable income to purchase brands. She's connected, quite
active on Internet forums and blogs and a first‐time buyer of
imported luxury brands. She won't be spending often but she'll be
saving up to buy brands where she gets the sense that she's
rewarding herself.

Her wealthier boyfriend by that I mean he's wealthier than she
is; she only has one boyfriend bought her a Tiffany ring
recently, and she was absolutely delighted. Yes, it cost more
than a similar ring at a family jeweller but the blue box, the
Tiffany guarantee and the discrete yet recognizable design
thrilled her.

She is one of the 2 million Weibo followers of Angelica
Cheung, the editor in chief of Vogue China and a veritable
fashion guru. She likes brands with history and reads about them
a lot.

Brittany Chen

Brittany is Tiffany's aunt though she's just ten years older.
She's a marketing director for a fast‐moving consumer goods
company in Shanghai.

She's Chinese in her style and has a slight, recognizable accent
when she speaks in English but if I hadn't met her in Shanghai, I
would probably have never guessed she was a local as she
could really be from anywhere, sounding as cosmopolitan as she
does. Brittany goes to London for business and enjoys relaxing
weekends in Taipei. She's planning to go to New Zealand with her
husband and daughter soon.

She has known foreign luxury brands for a while and is very
knowledgeable. Louis Vuitton doesn't do it for her. She likes
more niche‐y concepts like Miu Miu and Céline but has seen many
Italian and French fashion brands and thinks British Burberry or
Mulberry or American Tory Burch and Marc Jacobs are great
alternative options.

Tiffany and Brittany are at the heart of the Chinese luxury
market growth.They are putting pressure on traditional,
historical brands as they are very knowledgeable and won't be
moved by what most Chinese consumers have an interest in.

They know what they want, they are uncomfortable with brands that
seem to cater too much for the Chinese, and they are much more
subtle in displaying wealth than Calvin or Lewis.

Fashion editor for
Sina.com Yumeng Cheung wears vintage jewellery, Burberry sweater,
jacket from a Korean boutique and the bag is from China on day 2
of Paris Haute Couture Fashion Week Spring/Summer 2014, on
January 21, 2014 in Paris, FranceKirstin Sinclair/Getty Images

Hermes Zhou

When I asked him where he was from, Hermes said he was Canadian
even though I now know he was born in Beijing. True, he
spent more time growing up in Vancouver and studying in the
United States and London than in China, where his parents have a
place they are globetrotters too.

He speaks and writes English much better than I do; but hey, what
do you expect, I'm French!

He's 34. After working for a leading American consultancy firm,
he's now in asset management at a hedge fund, which has offices
in Shanghai, Hong Kong and Singapore. For the past three years,
he's been based in Hong Kong and is hopeful he can become a
partner at the firm.

He buys his girlfriend Saint Laurent bags and Van Cleef &
Arpels jewellery and buys himself Hermès clothes though he will
not go for the too‐obvious H‐buckle belt and he always wears a
pair of Tod's, at work or on weekends. He's into Italian wine,
Japanese whisky, complication watches and Maldives holidays.
His consumption profile is that of a very affluent New Yorker,
Londoner, Parisian or Tokyoite more than that of other Chinese.

A woman shops at Hermés in
Shanghai.LIU JIN/AFP/Getty
Images

The Middle‐Class Kingdom

Our five avatars are relevant for luxury demand today.

Tomorrow, they will dominate it. (See Figures I.2 and I.3).

Why?

Luxury demand is not just going to increase with consumers
trading up. The bulk of the increase in sales should come
mechanically from the fact that the number of Chinese nationals
able to afford the products will increase dramatically.

Sales to Chinese should broadly triple over the next ten
years.This may read like a bullish statement, but it is not if
the basic metrics of income creation in China is considered.

In 2015, Chinese should represent about 20% of luxury consumers
(or 75 million) and as much as 35% of sales, as their average
spending is much higher than that of other nationalities. (See
Table I-1.) The table below shows the evolution of luxury sales
by nationality over the next ten years.